With New Raise, Quid Wants to Cash Out So Cal Tech Employees

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

With New Raise, Quid Wants to Cash Out So Cal Tech Employees

If you're an employee at a hot startup like SpaceX or Scopely, you are probably lucky enough to own valuable shares in the company. But until your employer goes public – an increasingly elusive occasion – those shares represent little more than numbers on a cap table.

"People are really wealthy on paper, but they can't send their child to the school they want or buy their first home," said Josh Berman, CEO of Quid Capital Group, which announced Wednesday it has raised a $320 million second fund to offer liquidity to startup employees.

Startup employees have long been able to trade their shares on secondary markets. With Quid, they keep most of their shares and get a loan of up to 35% against their equity. In return, they pay an interest rate of around 7%, which is not due until the shares go public. They also give Quid a small percentage of shares.

"If the company cranks, we want a share of the upside," Berman said.

Because its collateral in the shares themselves, Quid only makes loans to employees at startups it judges to be sufficiently worth the risk. Since launching in 2017, it has doled out more than $100 million to employees at 24 startups including Airbnb, Uber, and Lyft.

Quid's model has become increasingly necessary as startups, awash in hundreds of millions in late stage capital, take far longer to go public than used to be the case.

Berman is a co-founder of MySpace, one of the earliest Los Angeles tech companies, and Quid is based in Santa Monica. But so far the only company it has partnered with here is the e-scooter unicorn, Bird Rides Inc.

Quid Managing Partners Josh Berman (left) and Anthony Tucker

"Most of our business is in San Francisco, but there are companies we love in L.A.," said Berman.

He says he plans for the second fund to target employees at 24 high-growth companies, including local unicorns Scopely, SpaceX, and Jam City.

Quid, which was spun out of Troy Capital Partners and Oaktree Capital earlier this year, is also backed by Davidson Kempner Capital Management and a group of investors including Spencer Rascoff, dot.LA's co-founder and executive chairman.

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Hosts Who Rent From “Airbnb-Friendly” LA Apartments May Not Make a Profit

Amrita Khalid
Amrita Khalid is a tech journalist based in Los Angeles, and has written for Quartz, The Daily Dot, Engadget, Inc. Magazine and number of other publications. She got her start in Washington, D.C., covering Congress for CQ-Roll Call. You can send tips or pitches to amrita@dot.la or reach out to her on Twitter at @askhalid.
LA house

L.A.’s lax enforcement of Airbnbs has led to an surge of illegal short-term rentals — even four years after the city passed a regulation to crack down on such practices. But what if hosts lived in a building that welcomed Airbnb guests and short-term rentals?

That’s the idea behind Airbnb’s new push to expand short-term rental offerings. The company is partnering with a number of corporate landlords that agreed to offer “Airbnb-friendly” apartment buildings, reported The Wall Street Journal last week. According to the report, the new service will feature more than 175 buildings managed by Equity Residential, Greystar Real Estate Partners LLC and 10 other companies that have agreed to clear more than 175 properties nationwide for short-term rentals.

But prospective hosts in Los Angeles who decide to rent apartments from Airbnb’s list of more than a dozen “friendly” buildings in the city likely won’t earn enough to break even due to a combination of high rents, taxes and city restrictions on short-term rentals. Rents on one-bedroom apartments in most of the partnered buildings listed soared well over $3,000 a month. Only a few studios were available under the $2,000 price range. If a host were to rent a one bedroom apartment with a monthly rent of $2,635 (which amounts to $31,656 annually), they would have to charge well over the $194 average price per night for Los Angeles (which amounts to $23,280 per year) according to analytics platform AllTheRooms.

Either way, residents who rent one of these Airbnb friendly apartments still have to apply for a permit through the City of Los Angeles in order to host on Airbnb.

“[..Airbnb-friendly buildings] seems like a good initiative. However, from a quick look, it seems that given the rent, Airbnb revenue wouldn’t be enough to cover all expenses if the host follows the city’s policy,” says Davide Proserpio, assistant professor of marketing at the USC Marshall School of Business.

In addition, since L.A.’s 120-day cap on short-term rentals still applies to the buildings on Airbnb’s listing platform, that greatly limits the number of longer-term guests a resident can host. Not to mention, some of the buildings that Airbnb lists have even shorter limits – The Milano Lofts in DTLA for example only allows residents to host 90 nights a year.

Airbnb’s calculations of host earnings may be greatly misleading as well, given that the estimate doesn’t include host expenses, taxes, cleaning fees or individual building restrictions. For example, Airbnb estimates that a resident of a $3,699 one bedroom apartment at the Vinz in Hollywood that hosts 7 nights a month can expect $1,108 a month in revenue if they host year-round. But the Vinz only allows hosts to rent 90 days a year, which greatly limits the potential for subletters and a consistent income stream.

Keep in mind too that since the apartment will have to serve as the host’s “primary residence”, hosts will have to live there six months out of the year. All of which is to say, it’s unclear how renting an apartment in an “Airbnb-friendly” building makes hosting easier — especially in a city where illegal short-term rentals already seem to be the norm.

https://twitter.com/askhalid

The Streamy Awards: The War Between Online Creators and Traditional Media Is Just Beginning

Kristin Snyder

Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

tiktok influencers around a trophy ​
Andria Moore /Charli D'Amelio/Addison Rae/JiDion

Every year, the Streamy Awards, which is considered the top award show within the creator economy, reveals which creators are capturing the largest audiences. This past Sunday, the event, held at The Beverly Hilton, highlighted some of the biggest names in the influencer game, chief among them Mr. Beast and Charli D’Amelio. It had all the trappings of a traditional award show—extravagant gowns, quippy acceptance speeches and musical interludes. But, as TikTok creator Adam Rose told The Washington Post, the Streamys still lacks the legitimacy of traditional award shows.

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Slingshot Aerospace Raises $40 Million to Expand Space Object Sensor Network

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Slingshot Aerospace Raises $40 Million to Expand Space Object Sensor Network
Photo: Slingshot Aerospace

Slingshot Aerospace, the El Segundo-based startup developing software for managing objects in space’s orbit, raised $40.9 million to build out its global network of sensors and recruit new customers both private and public.

The round was a follow-on to Slingshot’s $25 million Series A-1 raise in March.

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